Your Retirement Nest Egg

[oldag]

I’m honestly just trying to learn here. You say market timing is difficult, and that is the most accurate thing you’ve said in this thread. Jack Bogle famously said that he did not know anyone who had successfully timed the market, and he did not even know anyone who knew anyone who had successfully timed the market. The thing about market timing is you have to be right twice. So you have the buy date, but what is the sell date?

You said in an earlier post that I needed to stick to reality, and not theory. I’m trying to do that. To find scenarios where people outperform with XOM requires quite a bit of detachment from reality. It’s possible that people have done it out of pure luck, but that’s about it. In any scenario that I run, eventually the index comes out ahead. For example, XOM is not even close to market performance this year.

You say that I have not made my point, but I think it may just be that you don’t understand how your portfolio compares to the index. The only information in this thread shows your dividend strategy being an underperformer. You have not, and likely can not demonstrate that it is an outperformer, or even equal performer over the long run. But if I am wrong, I’d certainly like to see. I tried to find scenarios where I was wrong, but they just don’t exist. There is a good reason why Warren Buffet recommends people buy and hold an S&P 500 index, and that is because there are very few people who can do better. I can probably safely assume that none of the people who can are posting in this thread.

The topic of this thread is people needing more money to retire, so if we are discussing retirement strategies, I just think if there is a retirement strategy that is more likely to get people to their target number quicker, that would be good information to have. But so far, just saying dividends are better, and trying to reinforce that with an underperforming stock isn’t making a solid case for a dividend focus.

YOU DON"T KNOW MY PORTFOLIO! So there is no way you can judge it.

How incredibly...

Well, I will leave it at that.

You repeatedly continue to ignore a critical point. There are different strategies for different stages in life. I have repeatedly said I am not addressing those who are a ways from retirement.

Keep droning on, not reading or comprehending what others post.

 

[oldag]

If you’re in the 0% capital gain tax bracket is one way. Also if you have other losses that can offset the gains, that is another way to wipe them out. You can also hold the stock in a tax advantaged account and will not be taxed when you sell, only when you withdraw.

The point of my question though is that for people who use taxable accounts, then trying to beat the market with individual stocks will result in a capital gain if the stock does well, and tax drag can not be ignored when comparing portfolio strategies. so if a stock such as XOM is already an underperformer over the long term, then having to set aside money when it may be less favorable to pay taxes reduces that short term out performance.

Losses are never better than gains.

When a stock doubles, you can afford the tax if you need to sell. And still have done better than market average.

 

[TheDan]

I recall the stat that 85% of small businesses fail within the first several years. It ain't easy.

With the majority of people having a loser mentality, it's not hard to be on the winning side of the Pareto principle.

 

[toddnjoyce]

With the majority of people having a loser mentality, it's not hard to be on the winning side of the Perato principal.

Pareto.

 

[TheDan]

Pareto.

lol thanks... I had spelled "principle" wrong, too. You need coffee?

 

[Havok1]

YOU DON"T KNOW MY PORTFOLIO! So there is no way you can judge it.

How incredibly...

Well, I will leave it at that.

You repeatedly continue to ignore a critical point. There are different strategies for different stages in life. I have repeatedly said I am not addressing those who are a ways from retirement.

Keep droning on, not reading or comprehending what others post.

I know. I’m just trying to understand the style. If I can do better than I currently am, then I’d love to. For some reason you aren’t providing any information that could help me or others on our way to retirement. All you’ve given me so far is XOM which didnt do anything other than reinforce my point. Normally as people near retirement they reduce risk by reducing exposure on the equity side. This would be the first time I’ve heard someone make an argument for a lower performing stock based on the stage in life.

Losses are never better than gains.

When a stock doubles, you can afford the tax if you need to sell. And still have done better than market average.

If the individual stock takes longer to double than the market does then you did not in fact do better. Being able to afford taxes doesn’t mean I don’t want to reduce/defer them. Tax efficiency is a basic part of portfolio construction.

Nobody said losses were better than gains. However, when the market is down, such as last year, I try to take full advantage of whatever losses I can.

 

[toddnjoyce]

lol thanks... I had spelled "principle" wrong, too. You need coffee?

Naw, just woke up from. Propofol nap though.

 

[IXLR8]

How to Pay 0% in Taxes (Without Cheating)​

Investors and retirement savers have many tools at their disposal to whittle their incomes down to a point where capital gains are taxed at a 0% tax rate. The magic number for couples? $83,350.

How to Pay 0% in Taxes (Without Cheating)

Investors and retirement savers have many tools at their disposal to whittle their incomes down to a point where capital gains are taxed at a 0% tax rate. The magic number for couples? $83,350.

www.kiplinger.com